The National Minimum Wage was introduced AS LAW by the Labour government in April 1999. It has been uprated as follows:
NMWage 22+yrs 18-21yrs 16-17yrs
Apr-99 £3.60 £3.00 none
Jun-00 £3.70 £3.20 none
Oct-01 £4.10 £3.50 none
Oct-02 £4.20 £3.60 none
Oct-03 £4.50 £3.80 none
Oct-04 £4.85 £4.10 £3.00
Oct-05 £5.05 £4.25 £3.00
Oct-06 £5.35 £4.45 £3.30
Oct-07 £5.52 £4.60 £3.40
next increase 1st October 2008
- The minimum wage can be enforced by complaint to HM Revenue and Customs (HMRC) National Minimum Wage Enforcement Unit, which has a mere 100 inspectors at its disposal.
- HMRC NMW helpline 0845 6000 678, open Monday to Friday 9.00am to 5pm. Calls charged at local rate. All calls are taken in strict confidence. Callers can be assisted in 30 different languages.
- Only complaints that name the workers involved receive feedback from HMRC but complaints from third parties and anonymous complaints are also investigated.
- HMRC has the authority to impose enforcement notices and penalty notices on employers who break the law. An enforcement notice requires the employer in question to pay the NMW. Penalty notices are imposed on employers who fail to comply with enforcement notices. A penalty notice imposes a charge of £224.70 per underpaid worker. HMRC can also prosecute employers, but this is used as a last resort because the penalty notice system generally works and is quicker than taking a case to court.
- The Chancellor announced in December 2006 that the funding for minimum wage enforcement would be increased by 50 per cent. In January 2007 the Government substantially increased penalty notice charges.
- These measures are a good start to the process of tightening up enforcement but the TUC estimates that more than 150,000 workers are still underpaid so there is still more to be done. In the next year the TUC would like to see a new focus on enforcing the minimum wage for migrant workers, who find it particularly difficult to get their rights; the creation of a new power for trade unions to take representative and group actions to employment tribunal rather than having to rely on naming individual workers; and a sharpening of the incentives to pay the minimum wage by ensuring that all employers who are caught underpaying are subject to a financial penalty.
TUC comment on minimum wage rise:
Commenting on the publication of the Low Pay Commission`s report and the announcement that the adult minimum wage will increase to £5.52 an hour this October, TUC General Secretary Brendan Barber said:
`This increase will benefit over a million low-paid workers. But the Low Pay Commission (LPC) could have been bolder and kept the minimum wage rising faster than pay overall. There is still scope to continue raising the wages of the lowest paid compared to the rest of us without ill effects.
`The minimum wage in the UK remains a big success story. We have gone from having no minimum wage to one of the highest in the world.
`A key priority in this year`s debate has been to press for effective enforcement so that every worker is guaranteed their legal minimum. We are therefore pleased that the LPC has recommended that employers who flout the law should face tougher penalties.
`Bosses who fail to pay the minimum wage leave vulnerable workers in poverty and undercut the majority of employers who are happy to obey the law. Everybody stands to gain from making the minimum wage as robust as possible, therefore the Government should use the coming year to continue moving their enforcement work up a gear.
`Unions through collective bargaining and campaigns for a living wage will encourage employers to pay more than the legal minimum. In particular, profitable companies who pay their top directors handsome bonuses and who outsource vital support jobs to minimum wage employers will be named and shamed. No company that wants to be seen as socially responsible can outsource its conscience in this way.`